First Steps in SAP S/4HANA

2.1 The transition from ERP to S/4HANA

As mentioned briefly in the previous chapter, the new HANA database is significantly faster than conventional databases as far as reading data is concerned. SAP thus began, in multiple stages of innovation, to operate the existing ERP system on HANA.

Figure 2.1 is a graphical representation of the transition from ERP to S/4HANA. The first step was to operate a conventional ERP on the HANA database . However, because the system was not aligned with the new architecture, the only speed benefit was for lengthy evaluations. To take full advantage of the HANA database, the rest of the system, and in particular the transactions that write data, had to be redeveloped.

Figure 2.1: The transition from ERP to S/4HANA

At SAP, work was then undertaken separately on further development of the functions in the Financial Accounting and Controlling modules on the one hand, and in the Logistics module on the other hand. The functions in Financial Accounting were ready for delivery to customers faster than those in Logistics, which is why there are two intermediate products. The first intermediate product to appear was SAP Simple Finance, which corresponds to an ERP system but is operated on a HANA database. This product is equipped with the new functionality for Financial Accounting but with some technical restrictions. The next step was SAP S/4HANA Finance, a new system in which the updated functionality in Financial Accounting is fully developed , whereas Logistics is identical to that in ERP.

In the next step, Logistics came on board, meaning that with SAP S/4HANA , a new ERP system optimized to the HANA database in both Logistics and Financial Accounting was created. There is still some remaining functionality from the old ERP left over (referred to as the compatibility content), meaning that a migration from ERP to SAP S/4HANA is possible. This means that in a purely technical conversion, you can convert your existing ERP system into an SAP S/4HANA system by first replacing your old database with HANA and then converting your ERP into S/4HANA. All of your data and business processes remain unchanged. This migration approach is called a brownfield approach, in contrast to a greenfield approach in which you set up an empty SAP S/4HANA system from scratch and redefine all processes.

The new S/4HANA system is also available in two versions (which SAP calls deployment options): the on-premise edition and the Cloud edition . We explain the differences between the two options in Section 2.3.